Sugar Tax Proposed in Vermont General Assembly

Published April 1, 2015

Lawmakers in Vermont are proposing adding a $0.02-per-ounce tax on pop and other sugar-sweetened beverages, to increase funding for health entitlement spending in the state.

The tax is expected to raise $30 million, and would be levied on “any nonalcoholic beverage, carbonated or noncarbonated, that is intended or human consumption and contains any added sweetener.”

The new tax will help fund the state’s “State Health Care Resources Fund.” The Fund pays for the state’s Medicaid spending, as well as Catamount Health, a government-provided health insurance plan.

In addition to funding the state’s healthcare entitlement spending, revenues from the proposed tax would be used to back loans to “facilitate the purchase of energy-efficient refrigeration equipment for the sale of fruits and vegetables by small food retailers” and “provide electronic benefits transfer terminals to all Vermont farmers’ markets as well as technical assistance, promotional support, and reimbursement to farmers’ markets for transaction costs.” 

The bill would also require store owners and other food vendors to “secure a license from the Commissioner before engaging in the business of selling sugar-sweetened beverages in the state.”

In an article published in the Burlington Free Press, University of Vermont associate professor Art Woolf says legislators should think twice about enacting the tax.

“There is one more economic reason we should think carefully about enacting a sugar sweetened beverage tax,” he wrote. “That tax would be a regressive one, disproportionately affecting lower income Vermonters.

“Many legislators are quick to challenge any change in Vermont’s tax structure that isn’t progressive. Why shouldn’t this tax be subject to the same scrutiny and concern?”

Jesse Hathaway ([email protected]) is managing editor of Budget & Tax News.